| Summary: | 博士 === 國立中央大學 === 企業管理研究所 === 94 === Holderness (1990) suggests that director’ and officers’ (D&O) liability insurance has an important governance role in publicly owned companies. O’Sullivan (1997) empirically tests Holderness’s monitoring hypothesis, the results generally support the monitoring hypothesis. By examining the association between board composition, managerial ownership, external shareholder control, and the purchase of D&O insurance, this paper examines the role of Directors’ and Officers’ liability insurance in corporate governance of 619 TSE-Listed and Over-the-Counter Listed (OTC-Listed) electronic companies in Taiwan. Although the results merely partly support the monitoring hypothesis, this study not only can be considered an important first step in attempting to understand the governance role of D&O insurance but also provide some further insights on the demand for D&O insurance in Taiwan.
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